Warren Buffett and Charlie Munger have famously said that you should not diversify. They have also said that diversification should be called di-worse-ification. Other people have said they didn’t mean it. Well, they kind of did. The Right Way To Think Of Diversification You should diversify to prevent “actual loss” rather than “market loss”. Actual… Read More »
There are a lot of different funds, i.e. ETFs, that trade in a weird way. For instance NVDY makes money by selling options on NVDA… or whatever they do. I’ve never bought NVDY but if I did, I would really understand it. And I guess that’s the point. If you choose to buy any kind… Read More »
I am not a “trader”, I am an “investor” so typically I buy and hold individual stocks. Let’s say though that I invest in QQQ (Nasdaq 100) and over 10 years it averages 18% per year. If I invest in another ETF that also averages 18%, what is my total return? 18%. Why? Because ta… Read More »
So the market is up a bunch in the past year, what should you do? Here are my answers: You are retired and drawing upon your savings You should probably already have a balanced portfolio that can weather ups and downs. Not too much in bonds, not too much in stocks, but not so little… Read More »
I haven’t written in a while, sorry about that. For all of you that bought meme stocks, sorry for your losses. For those that have lost 30% or more this year, sorry about that too. Ok, lesson today: For the big picture stuff, nobody fu***** knows anything. Nobody knows if we are going to get… Read More »
I mean that both literally and perhaps not so literally. There will be time when market value will decline and your gain will be negative. There will also be times when you want to sell a loser, and have a good reason. The hope is that overall your stock portfolio will gain, in time, much… Read More »
I read an article on Seeking Alpha this week from 2016 which stated that holding 50% in UPRO and 50% in TMF and rebalancing weekly outperforms the best performing stock in the S&P 500. Over the past year, I believe this performance would have been about a 49% gain, where the S&P had a small… Read More »
Diversification is the idea that owning stock of companies in different businesses, different sectors, and or different regions reduces the risk of a portfolio. While there are some extreme cases where diversification might prevent actual loss, the main thing diversification does is reduce volatility. What is Risk? Risk is the likelihood that you will make… Read More »
Are you an internal locus of control person or an external? External locus of control people believe that everything that happens to them is beyond their control. Internal locus of control people believe that they control what happens to them for the most part. Let me tell you, if you are going to blame anybody… Read More »